A manufacturing company uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

The following data pertain to operations for the most recent period:

-The fixed manufacturing overhead volume variance for the period is closest to:
A)$1,359 U
B)$2,550 F
C)$3,902 U
D)$1,352 U

Question

A manufacturing company uses a standard costing system in which standard machine-hours (MHs) is the measure of activity. Data from the company's flexible budget for manufacturing overhead are given below:

The following data pertain to operations for the most recent period:

-The fixed manufacturing overhead volume variance for the period is closest to:
A)$1,359 U 
B)$2,550 F 
C)$3,902 U 
D)$1,352 U

Quizplus · Accepted Answer

The fixed manufacturing overhead volume variance is calculated as the difference between the budgeted fixed manufacturing overhead and the actual fixed manufacturing overhead. In this case, the budgeted fixed manufacturing overhead is $15,000 and the actual fixed manufacturing overhead is $13,648. Therefore, the fixed manufacturing overhead volume variance is $15,000 - $13,648 = $1,352 U.

A Manufacturing Company Uses a Standard Costing System in Which